O 60% To determine the optimal capital structure, the market value of the stock must be known. Question 3 5 pts This year, Ferro Inc, generated sales of $10 million. Its fixed operating cost is $1 million and its variable cost ratio is 30 percent of sales. Ferro has 560 million of debt outstanding with a before-tax cost of 12 percent. Which of the following statements about Ferro's times interest camned (TIE) ratio is correct? Ferro's TIE ratio is 1.20, which suggests it has enough earnings to meet the required interest payments. Ferro's TIE ratio is 0.83, which suggests it does not have enough earnings to meet the required interest payments. Ferro's TIE ratio is 0.83, which suggests it has enough earnings to meet the required interest payments. Ferro's TIE ratio is 1.39, which suggests it does not have enough cmnings to meet the required interest payments. Ferro's TIE ratio is 1.00, which suggests it has just enough earnings to meet the required interest payments. 5p Question 4 information The situation in which managers have different (better) information about their firm's prospects than outside investors is known as